GL PharmTech, a provider of drug formulations and delivery technologies for generic and enhanced version of marketed drugs, is pushing to expand its footing in the pharmaceutical industry.
According to industry sources, the company is seeking a more significant impact on local drugmakers by jointly developing a new drug candidate with DongA ST, after buying a significant stake in Crown Pharm.
GL PharmTech on Tuesday concluded a contract with DongA ST to develop a drug candidate called DA-6034 to treat gastritis and dry eye. The local dry eye market is estimated to reach 160 billion won ($147.6 million) in drug sales.
Under the contract, DongA ST allowed GL PharmTech to develop a new drug with DA-6034, use the patent, and sell related drug products around the globe, including Korea. GL PharmTech agreed to continue follow-up R&D and come up with an incrementally modified drug (IMD) using DA-6034 and seek regulators’ approval for a new drug.
DongA ST will have a preferential right for negotiation over a new drug in the exclusive local sales.
The contract between DongA ST and GL PharmTech draws attention because the two firms capable of developing new drugs decided to team up with each other.
“The contract is about a small- and medium-sized venture firm taking up a follow-up drug development based on material developed originally by a bigger pharmaceutical firm,” GL PharmTech said. “It is different from other agreements between local firms that usually focus on sales partnership.”
The core purpose of the contract centers on GL PharmTech’s strength in drug formulation technologies. The company has developed or transferred technologies for 40 generic drugs and four IMDs. It also holds 17 patents around the world.
A start-up firm with clear expertise easily becomes a target for acquisition by a large pharmaceutical company. However, GL PharmTech has become an influential midsize firm, working with more than 50 drugmakers. It means that the pharmaceutical industry has recognized its technologies and the company has enhanced its status in the industry.
GL PharmTech came under the spotlight in the pharmaceutical industry when it acquired a sizable stake in Crown Pharm.
On Nov. 15, the company announced in a regulatory filing that it would buy 53,910 shares of Crown Pharm for about 1.43 billion won.
Following the largest stakeholder and Crown Pharm CEO Shin Jae-kook with a 67.91 percent, GL PharmTech has become the second largest shareholder with a 32.09 percent stake. GL PharmTech said the acquisition was to expand its value chain through GMP (good manufacturing practice) facilities and participate in management.
GL PharmTech plans to review Crown Pharm’s production ratio and a change in the company’s name and make the final decision later. Crown Pharm will maintain an existing partnership with other manufacturers, GL PharmTech said.
GL PharmTech is developing a new treatment for neuropathic pain, GLA5PR, eyeing on an estimated 6 trillion won market. It is also pushing for the commercialization of DA-6034, under the license contract with DongA ST, as it has completed a phase-2 clinical trial on the drug candidate.
Observers are watching closely whether GL PharmTech could make another leap into the production of new drugs after enlarging its share in the pharmaceutical industry with advanced technologies.